Google battles Amazon for corporate Clouds

Google says it's in the enterprise Cloud market to stay and and will continue to cut prices as it competes with Amazon, IBM, Microsoft and HP.

Company: Google, Inc.

Headquarters: Mountain View, Calif.

Employees: 50,000

2013 Revenue: $60 billion

CEO: Larry Page

What They Do: Google's general mission is to make the world's information universally accessible and useful, and it's best known for search and online advertising technologies. But along the way it built up a stack of datacentre services that enterprises can rent for scaleable IT infrastructure and applications.

The Pitch

In March, Google rebranded its infrastructure and platform hosted services as Google Cloud Platform and set about persuading enterprises to migrate their applications to Google's compute, storage and application services.

IBM, Microsoft and Hewlett-Packard made similar marketing blitzes, as if they all realized the Cloud might actually have legs. "I don't think anyone in 2014 believes that enterprise IT won't move to the Cloud," says Brian Goldfarb, head of Google Cloud Platform marketing.

Google cut prices to beat those of chief rival Amazon Web Services (AWS); AWS and Microsoft immediately countered by slashing their own prices. But Google vowed to keep cutting prices to match the declining costs of the storage and processors that power the Cloud. "We believe, fundamentally, it should never be cheaper to run IT yourself, ever," Goldfarb says. "We want customers to focus on their core business."

The Catch

Until now, Google mostly let the security, reliability and speed of its technology do the talking.

"When it comes to the data center, we're able to out-invest, out-innovate and out-focus pretty much anyone else doing this," Goldfarb says. For example, it was a Google researcher who discovered the Heartbleed vulnerability.

"We're on top of [security] in a way no one else could be," he says.

But Google hasn't had much experience with corporate IT departments. "For the enterprise decision-maker, it's not just about the technology and pricing, but [also about] a partner ecosystem and road maps that show where the products will go," says Nucleus Research analyst Rebecca Wettemann.

Plus, there have been a few disconcerting cases where Google abruptly discontinued products--Google Wave and Google Reader to name two. Would enterprises be left in the lurch should Google decide cloud isn't important to its bottom line after all?

Google could also use some marquee corporate customers, like Netflix is for AWS. IT executives "want to see other folks who are using Google apps successfully in their businesses," Wettemann says.

The Score

Nonetheless, many organizations do use Google's Cloud service and tout its viability. Financial reporting service provider WebFilings, for instance, has relied on Google App Engine since the company was founded in 2008. Using Google has allowed WebFilings to scale faster and adjust its offerings more quickly to meet demands of customers, which now include a sizable portion of the Fortune 500, says WebFilings CEO Matthew Rizai.

Google's Goldfarb acknowledged that Microsoft and other traditional IT companies do have large partner networks, but Google is working to build up its own network. It now has over 200 partners and another 200 in the enrollment process.

And concerns about discontinuing software are overblown, Goldfarb says. While Google has discontinued some experimental offerings, he says it sees enterprise IT cloud computing as a core service, and plans to back its customers for years to come.

"I don't expect them to walk away from this market at all," says Forrester Research analyst John Rymer. "At one time, I wasn't so sure. But I think Google is in it for the long haul."

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